The administration is implementing a provision of the ACA to allow 'health-contingent' wellness programs in the individual market.
Insurers selling individual market health plans in certain states may soon be allowed to encourage healthier behaviors among plan members by offering discounted premiums and other incentives to those who participate in wellness programs.
The federal government will give 10 states a chance to participate in a demonstration project that will allow the so-called "health-contingent" programs in participating states' individual markets, as the Centers for Medicare & Medicaid Services announced Monday with an informational bulletin.
CMS Administrator Seema Verma said the change will support the Trump administration's efforts to give states more leeway and to empower members of the public to make their own healthcare decisions.
"Allowing states to implement these wellness programs in their individual markets offers the opportunity to not only improve the health of their residents but also to help reduce healthcare spending," Verma said in a statement.
This demonstration project is the only context in which the Affordable Care Act allows individual market health plans to offer health-contingent wellness programs, according to the CMS announcement. If Health and Human Services, Labor, and Treasury officials determine the demonstration project is effective, they may expand it to more states after three years, according to the bulletin.
States that wish to participate must show that their programs won't result in any decrease in coverage or increase in cost to the federal government's ACA exchange subsidies, according to the CMS announcement.
States must also make sure that their wellness programs don't discriminate based on a person's health status, the agency said—which is why states must make sure reasonable alternatives are available to those who can't meet the wellness program's standards, due to a preexisting or other medical condition.
Participating states must submit performance data to the federal government for the review process.
Although wellness programs are common among employer-sponsored health plans, academic studies have found them to be largely ineffective in impacting healthcare usage or costs.
A study published earlier this year by the Journal of the American Medical Association reviewed records for nearly 33,000 employees at a large company and found employees at worksites with a wellness program reported significantly higher rates of certain health behaviors but no significant effects on clinical measures, healthcare spending, or utilization.
"Although limited by incomplete data on some outcomes, these findings may temper expectations about the financial return on investment that wellness programs can deliver in the short term," the researchers, Zirui Song, MD, PhD, and Katherine Baicker, PhD, wrote.
Related: Seema Verma's American Dream: Empower Consumers, Unleash Competition
Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.
KEY TAKEAWAYS
The demonstration project will allow 10 states to apply for permission to bring such wellness programs to their individual markets.
If three departments deem the project a success, they may expand it to other states after three years.